The State of the Vatican City is the smallest country in the world, a landlocked enclave surrounded by the city of Rome in Italy.
The Vatican is the home of the Pope, and forms the territory of the Holy See, the central authority of the Roman Catholic Church.
The Vatican is located upon the Vatican Hill.
As an independent state, the Vatican has the right to to send and receive diplomatic representatives, including foreign embassies, which are located in the Italian part of Rome due to the very limited territory of the state.
This means, very curiously, that Italy hosts its own Embassy of Italy.